1. Field of the Invention
The present invention generally relates to a system and a method for wirelessly transferring funds from one financial transaction account to another financial transaction account. More particularly, the present invention relates to a system and a method for enabling an account holder of a financial transaction account to transfer funds to a financial transaction account of another account holder, via wireless communications, during a person-to-person interaction between the account holders.
2. Related Art
Consumers very often use financial transaction instruments as convenient forms of payment for purchases of goods and/or services (“goods/services”) instead of using cash or checks. Traditionally, a “financial transaction instrument” is embodied as a card-shaped device, also referred to herein as a “card,” and may be any of the following: a traditional “plastic” transaction card (e.g., a credit card, a charge card, a debit card, a pre-paid or stored-value card, or the like); a titanium-containing, or other metal-containing, transaction card; a clear or translucent transaction card; a foldable or otherwise unconventionally-sized transaction card; or any other type of card used in connection with a financial transaction.
It is common for financial transaction instruments to be shaped as cards that fit in a wallet, to make them convenient for consumers to carry one or more when traveling or performing day-to-day activities outside their homes. Many consumers regularly carry several such cards at a time, with each card corresponding to a different financial transaction account. This sometimes causes a great deal of inconvenience, especially when each of the several cards must be searched in order to find a particular card to be used for a financial transaction (e.g., when a merchant only accepts an American Express® card for the transaction). Also, when a consumer carries several cards at a time, the consumer may misplace or lose one of the cards and not become aware of the missing card until the next time the card is to be used, which may not be for days or weeks or longer. If it turns out that the missing card was stolen and then used for fraudulent purchases, both the card issuer and the consumer can suffer monetary losses. Therefore, there is a need for a convenient way for consumers to make purchases that does not require the use of a card. More generally, there is a need for a convenient way for a person to transfer funds to another person that does not require the use of cash, a check, or a card.
More recently, new types of financial transaction instruments, configured with electronic functionality, have become popular. Electronic circuitry is printed on or otherwise incorporated within these instruments for implementing financial transactions. One such instrument is a contactless transaction card, sometimes referred to as a “smart card.” Contactless transaction cards may be equipped with electronic circuitry for wirelessly communicating data to and/or reading data from a card reader/writer, which reads data from or transfers data to such transaction cards. The wireless communication of data may occur via an electromagnetic transmission or other type of wireless transmission. Contactless transactions cards, however, present the same inconveniences and drawbacks as other cards, as discussed above. Another such instrument is a fob-type device shaped to dangle from a keychain, in which a wireless transponder and reader are incorporated in the device. Fob-type devices, however, tend to be bulky. Therefore, if a consumer carries several such devices on a keychain, it may be uncomfortable and/or unsightly for the consumer to keep the keychain in a clothing pocket, or it may require the consumer to use a larger handbag than otherwise would be necessary. Of course, if the several fob-devices are carried around loosely (i.e., not on a single keychain), then a similar drawback occurs as with cards. That is, a consumer may not becoming aware of a misplaced or lost device until the next time the device is to be used, which may not be for days or weeks or longer, and which may cause economic losses for the consumer and/or the device issuer if it turns out that the missing device was stolen and then used for fraudulent purchases. Therefore, there is a need for a convenient way for consumers to make purchases that does not require the use of a fob-type device. More generally, there is a need for a convenient way for a person to transfer funds to another person that does not require the use of cash, a check, or a fob-type device.
As used herein, a “financial transaction account,” also referred to herein as a “transaction account,” may be a bank account, a credit account, or the like. For example, a bank account may be a savings account, a checking account, a money-market account, or the like; and a credit account may be a transaction account associated with a pre-approved line of credit.
Also, as used herein, the term “merchant” refers to any person, entity, distributor system, software, and/or hardware that is a provider or broker of goods/services, and includes any other entity in the distribution chain of goods/services. For example, a typical merchant may be a grocery store, a retail store, a travel agency, a service provider, a public-service utility, a school, a library, an on-line merchant, a government agency, or the like. A non-typical merchant may be a host of a garage sale or a host of a fund-raising activity, for example.
Also, as used herein, the terms “consumers,” “customers,” and “users” may be used interchangeably to refer to persons who purchase goods/services from merchants.
In regard to use of a financial transaction account, a consumer may communicate or interact with a traditional merchant in person (e.g., at a store), telephonically, or electronically (e.g., from a computer via the Internet). During the interaction, the merchant may offer good/services to the customer. The merchant also may offer the customer an option to pay for the goods/services using any number of available transaction accounts via their corresponding financial transaction instruments.
Generally, a traditional merchant that wants to provide customers with the option to pay for goods/services with a particular type of financial transaction instrument will enter into an agreement with the issuer of that type of instrument (e.g., American Express®, Visa®, Discover®, MasterCard®, or the like). The issuer typically is a financial organization (e.g., American Express®, JPMorgan Chase, MBNA®, Citibank®, or the like).
Although financial transaction instruments (e.g., cards and fob-type devices) provide consumers with a convenient way to pay for purchases and also provide traditional merchants with a convenient way to obtain payment for purchases, non-traditional merchants generally cannot take advantage of the conveniences without an agreement with the issuers. In other words, a garage-sale host cannot accept payments by credit cards or debit cards without pre-established agreements with the issuer of those cards. Therefore, non-traditional merchants, such as street artists, garage-sale hosts, community fundraisers, and the like, must ask their customers to pay with cash or checks. This may reduce the number of sales and the sales revenue made by non-traditional merchants, because many consumers rely on the use of cards for purchases and do not routinely carry checks or a large amount of cash (i.e., an amount over about $20).
Given the foregoing, a need exists for a system that conveniently enables consumers to make purchases that does not require the use of a card or a fob-type device. More generally, there is a need for a system that enables a person to transfer funds directly to another person that does not require the use of cash, a check, a card, or a fob-type device.